Exhibit 99
FOR IMMEDIATE RELEASE
3M Reports Strong Third-Quarter Results
- Company Again Raises Sales and Earnings Outlook on Positive Sequential Growth
ST. PAUL, Minn. Oct. 22, 2009 - 3M (NYSE: MMM) today announced third-quarter earnings of $1.35 per share on sales of $6.2 billion, with operating income margins of 23.9 percent (a). Sales and per-share earnings declined 5.6 percent and 4.3 percent year-on-year, respectively. On a sequential basis, sales and per-share earnings increased 8.3 percent and 20.5 percent, respectively, and operating income margins improved by 3.1 percentage points versus second quarter levels. Free cash flow (i) for the third quarter was $1.6 billion, up 97 percent year-on-year.
Excluding special items (b-f), net income was $971 million and earnings were $1.37 per share, down 2.8 percent and 3.5 percent year-on-year, respectively. 3Ms Display and Graphics and Health Care businesses each delivered double-digit year-on-year profit improvements. All business segments and all geographic regions reported sequential sales improvements.
These results reflect the strength of 3Ms business model as we again delivered higher than expected sales, strong operating margins and outstanding free cash flow, said George W. Buckley, 3M chairman, president and CEO. At the same time, we continued to invest in research and development, improving our supply chains and strengthening our brands and customer relationships, which will position us well as economies improve.
For the second consecutive quarter, the company raised its 2009 earnings expectations. 3M now expects 2009 full-year earnings to be in the range of $4.50 to $4.55 per share, versus a prior range of $4.10 to $4.30. The company also updated its 2009 organic sales volume expectations to a decline of 9.5 percent to 10.5 percent from a previous range of down 10 percent to down 13 percent. All estimates quoted exclude special items.
Key Financial Highlights
Third-quarter worldwide sales totaled $6.2 billion, a year-on-year decrease of 5.6 percent. Local-currency sales including acquisitions decreased 3.3 percent, while currency translation effects reduced sales by 2.3 percent.
Local-currency sales including acquisitions increased 5.5 percent in Display and Graphics and 4.7 percent in Health Care, offset by declines of 2 percent in Safety, Security and Protection Services, 4.8 percent in Consumer and Office, 6.4 percent in Industrial and Transportation and 15.3 percent in Electro and Communications. Excluding special items (b-f), third-quarter net income was $971 million, or $1.37 per share, versus $999 million, or $1.42 per share, in the third quarter of 2008.
Business Segment Highlights
(Operating income and margin figures exclude special items (b-f))
Industrial and Transportation
· Sales of $1.9 billion, down 6.4 percent year-on-year in local currency, including a 3 percent benefit from acquisitions; currency impacts reduced sales by 2.2 percent.
· Continued year-on-year declines in many large industrial markets, such as automotive OEM and home appliances, although quarter-on-quarter trends are improving.
· Double-digit local-currency growth in both the automotive aftermarket and renewable energy businesses.
· Sequential sales and operating income improved by 10.1 percent and 22.7 percent, respectively, led by the industrial adhesives and tapes and automotive OEM businesses.
· Operating income of $403 million, with strong operating margins of 21.2 percent.
Health Care
· Sales of $1.1 billion, up 4.7 percent year-on-year in local currency; currency impacts reduced sales by 3.1 percent.
· Local-currency sales growth led by the skin and wound care, infection prevention and oral care businesses; drug delivery local-currency sales were down year-on-year.
· Profits increased year-over-year in all businesses.
· All major geographic regions drove positive local-currency sales growth.
· Operating income increased 12 percent to $340 million and operating margins were 31.5 percent.
Consumer and Office
· Sales of $923 million, down 4.8 percent year-on-year in local currency, which includes 2.8 percentage points from acquisitions; currency impacts reduced sales by 1.8 percent.
· Double-digit local-currency sales declines in the office channel; high unemployment levels were a major factor.
· Overall soft consumer spending drove local-currency sales declines in the mass retail and do-it-yourself channels.
· Positive local-currency sales growth in both home care cleaning products and in consumer health care, driven by the recent acquisitions of Futuro® and ACE brands in the consumer health care market.
· Sales increased sequentially in most businesses, including consumer mass retail, home care cleaning and consumer health care businesses.
· Operating income of $227 million, with strong operating margins of 24.6 percent.
Display and Graphics
· Sales of $896 million, up 5.5 percent year-on-year in local currency, including 2.5 percentage points of growth from acquisitions; currency impacts reduced sales by 1 percent; sales rose 10.8 percent sequentially.
· Sales in optical systems rose 26 percent year-on-year and 27 percent sequentially, driven by new products for eco-friendly LCD displays along with overall improvement in LCD market volumes.
· Single-digit local-currency sales growth in traffic safety systems; business conditions in commercial graphics remain challenging.
· Operating income up 12 percent to $204 million, with margins of 22.8 percent.
Safety, Security and Protection Services
· Sales of $864 million, down 2 percent year-on-year in local currency; currency translation impacts reduced sales by 4.1 percent.
· Single-digit local-currency sales growth in security systems and in personal protective products, driven by H1N1-related respirator demand.
· Respirator manufacturing plants running at full capacity; adding new respirator capacity to address substantial near-term backlog.
· Difficult economic conditions continued to hurt sales of corrosion protection products.
· Operating income increased 9.8 percent to $236 million, with strong operating margins of 27.3 percent.
Electro and Communications
· Sales of $617 million, down 15.3 percent year-on-year in local currency; currency translation reduced sales by 0.9 percent.
· Sales impacted by continued weak market conditions in telecom and commercial construction; despite these challenges, sales and operating income improved sequentially in all major geographies.
· Operating income down 26 percent to $117 million, with margins of 19 percent.
· On a sequential basis, sales increased 12 percent and operating income increased 59 percent.
George W. Buckley and Patrick D. Campbell, senior vice president and chief financial officer, will conduct an investor teleconference at 9 a.m. Eastern Time (8 a.m. Central Time) today. Investors can access a Webcast of this conference, along with related charts and materials, at http://investor.3M.com.
Forward-Looking Statements
This news release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) about the companys financial results and estimates, business prospects, and products under development that involve substantial risks and uncertainties. You can identify these statements by the use of words such as anticipate, estimate, expect, project, intend, plan, believe, will, and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic and capital markets conditions; (2) the Companys credit ratings and its cost of capital; (3) competitive conditions and customer preferences; (4) foreign currency exchange rates and fluctuations in those rates; (5) the timing and acceptance of new product offerings; (6) the availability and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (7) the impact of acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (8) generating fewer productivity improvements than estimated; and (9) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the companys Annual Report on Form 10-K for the year ended Dec. 31, 2008 and its subsequent Quarterly Reports on Form 10-Q (the Reports). Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under Risk Factors in Part I, Item 1A (Annual Report) and in Part II, Item 1A (Quarterly Report). The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.
About 3M
A recognized leader in research and development, 3M produces thousands of innovative products for dozens of diverse markets. 3Ms core strength is applying its more than 40 distinct technology platforms often in combination to a wide array of customer needs. With $25 billion in sales, 3M employs 75,000 people worldwide and has operations in more than 60 countries.
3M Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(Millions, except per-share amounts)
(Unaudited)
|
|
Three-months ended |
|
Nine-months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
||||
Net sales |
|
$ |
6,193 |
|
$ |
6,558 |
|
$ |
17,001 |
|
$ |
19,760 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
||||
Cost of sales |
|
3,171 |
|
3,432 |
|
8,920 |
|
10,278 |
|
||||
Selling, general and administrative expenses |
|
1,209 |
|
1,269 |
|
3,642 |
|
3,938 |
|
||||
Research, development and related expenses |
|
335 |
|
344 |
|
967 |
|
1,058 |
|
||||
(Gain) loss on sale of businesses |
|
|
|
|
|
|
|
23 |
|
||||
Total operating expenses |
|
4,715 |
|
5,045 |
|
13,529 |
|
15,297 |
|
||||
Operating income |
|
1,478 |
|
1,513 |
|
3,472 |
|
4,463 |
|
||||
Interest expense and income |
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
55 |
|
52 |
|
165 |
|
158 |
|
||||
Interest income |
|
(8 |
) |
(28 |
) |
(26 |
) |
(76 |
) |
||||
Total interest expense (income) |
|
47 |
|
24 |
|
139 |
|
82 |
|
||||
Income before income taxes |
|
1,431 |
|
1,489 |
|
3,333 |
|
4,381 |
|
||||
Provision for income taxes |
|
460 |
|
479 |
|
1,040 |
|
1,402 |
|
||||
Net income including noncontrolling interest |
|
971 |
|
1,010 |
|
2,293 |
|
2,979 |
|
||||
Less: Net income attributable to noncontrolling interest |
|
14 |
|
19 |
|
35 |
|
55 |
|
||||
Net income attributable to 3M (a) |
|
$ |
957 |
|
$ |
991 |
|
$ |
2,258 |
|
$ |
2,924 |
|
Weighted average 3M common shares outstanding basic |
|
702.8 |
|
695.5 |
|
697.7 |
|
701.3 |
|
||||
Earnings per share attributable to 3M common shareholders basic |
|
$ |
1.36 |
|
$ |
1.43 |
|
$ |
3.24 |
|
$ |
4.17 |
|
Weighted average 3M common shares outstanding diluted |
|
710.8 |
|
703.1 |
|
702.3 |
|
710.7 |
|
||||
Earnings per share attributable to 3M common shareholders diluted (a) |
|
$ |
1.35 |
|
$ |
1.41 |
|
$ |
3.21 |
|
$ |
4.11 |
|
Cash dividends paid per 3M common share |
|
$ |
0.51 |
|
$ |
0.50 |
|
$ |
1.53 |
|
$ |
1.50 |
|
(a) 3M adopted a new accounting standard relating to the reporting of noncontrolling interest in partially owned consolidated subsidiaries effective January 1, 2009. The new standard, among other things, changed the presentation format and certain captions of the consolidated income statement and consolidated balance sheet. 3M uses the captions recommended by this standard in its consolidated financial statements such as net income attributable to 3M and earnings per share attributable to 3M common shareholdersdiluted. However, in the preceding release 3M has shortened this language to net income and earnings per share (or a slight variation thereof), respectively.
3M Company and Subsidiaries
SUPPLEMENTAL CONSOLIDATED STATEMENT OF INCOME INFORMATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Millions, except per-share amounts)
(Unaudited)
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the company also discusses non-GAAP measures that exclude special items. Operating income, net income attributable to 3M (hereafter referred to as net income), and diluted earnings per share attributable to 3M common shareholders (hereafter referred to as diluted earnings per share) are all measures for which 3M provides the reported GAAP measure and an adjusted measure (excluding special items). Special items are not in accordance with, nor are they a substitute for, GAAP measures. Special items represent significant charges or credits that are important to an understanding of the companys ongoing operations. The company uses these non-GAAP measures to evaluate and manage the companys operations. The company believes that discussion of results excluding special items provides a useful analysis of ongoing operating trends. The determination of special items may not be comparable to similarly titled measures used by other companies.
The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three-months and nine-months ended September 30, 2009.
|
|
Three-months ended |
|
Nine-months ended |
|
||||||||||||||
|
|
September 30, 2009 |
|
September 30, 2009 |
|
||||||||||||||
|
|
|
|
|
|
Diluted |
|
|
|
|
|
Diluted |
|
||||||
|
|
Operating |
|
Net |
|
earnings |
|
Operating |
|
Net |
|
earnings |
|
||||||
|
|
income |
|
income |
|
per share |
|
income |
|
income |
|
per share |
|
||||||
Reported GAAP measure |
|
$ |
1,478 |
|
$ |
957 |
|
$ |
1.35 |
|
$ |
3,472 |
|
$ |
2,258 |
|
$ |
3.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Restructuring activities (b) |
|
26 |
|
14 |
|
0.02 |
|
209 |
|
128 |
|
0.18 |
|
||||||
Gain on sale of real estate (c) |
|
|
|
|
|
|
|
(15 |
) |
(9 |
) |
(0.01 |
) |
||||||
Adjusted Non-GAAP measure |
|
$ |
1,504 |
|
$ |
971 |
|
$ |
1.37 |
|
$ |
3,666 |
|
$ |
2,377 |
|
$ |
3.38 |
|
(b) During the first three quarters of 2009, management approved and committed to undertake certain restructuring actions, which resulted in a net pre-tax charge for the three-months and nine-months ended September 30, 2009, of $26 million and $209 million, respectively. This charge related to employee-related liabilities for severance/benefits and other for the three-months ended September 30, 2009. Employee-related liabilities for severance/benefits and other of approximately $190 million and fixed asset impairments of approximately $19 million were recorded for the nine-months ended September 30, 2009, with all business segments impacted by these actions. For the
three-months ended September 30, 2009, these charges were recorded in cost of sales and research, development and related expenses, with these expenses totaling $25 million and $1 million, respectively. For the nine-months ended September 30, 2009, these charges were recorded in cost of sales; selling, general and administrative expenses; and research, development and related expenses, with these expenses totaling $110 million, $91 million and $8 million, respectively.
(c) In June 2009, 3M completed the sale of a New Jersey roofing granule facility and recorded a pre-tax gain of $15 million. This gain was recorded in cost of sales within the Safety, Security and Protection Services business segment.
The reconciliation provided below reconciles the non-GAAP operating income measure by business segment with the most directly comparable GAAP financial measure for the three-months and nine-months ended September 30, 2009. As discussed in more detail later in the section entitled Business Segments, 3M made certain changes to its business segments in the first quarter of 2009. Segment information for all periods presented has been reclassified to reflect these changes.
|
|
Three-months ended |
|
Nine-months ended |
|
||||||||||||||
|
|
September 30, 2009 |
|
September 30, 2009 |
|
||||||||||||||
OPERATING |
|
Reported |
|
|
|
Adjusted |
|
Reported |
|
|
|
Adjusted |
|
||||||
INCOME BY |
|
GAAP |
|
Special |
|
Non-GAAP |
|
GAAP |
|
Special |
|
Non-GAAP |
|
||||||
BUSINESS SEGMENT |
|
measure |
|
items |
|
measure |
|
measure |
|
items |
|
measure |
|
||||||
Industrial and Transportation |
|
$ |
382 |
|
$ |
21 |
|
$ |
403 |
|
$ |
841 |
|
$ |
88 |
|
$ |
929 |
|
Health Care |
|
339 |
|
1 |
|
340 |
|
975 |
|
20 |
|
995 |
|
||||||
Consumer and Office |
|
227 |
|
|
|
227 |
|
589 |
|
13 |
|
602 |
|
||||||
Safety, Security and Protection Services |
|
236 |
|
|
|
236 |
|
544 |
|
2 |
|
546 |
|
||||||
Display and Graphics |
|
206 |
|
(2 |
) |
204 |
|
449 |
|
22 |
|
471 |
|
||||||
Electro and Communications |
|
116 |
|
1 |
|
117 |
|
204 |
|
11 |
|
215 |
|
||||||
Corporate and Unallocated |
|
(7 |
) |
5 |
|
(2 |
) |
(72 |
) |
38 |
|
(34 |
) |
||||||
Elimination of Dual Credit |
|
(21 |
) |
|
|
(21 |
) |
(58 |
) |
|
|
(58 |
) |
||||||
Total Operating Income |
|
$ |
1,478 |
|
$ |
26 |
|
$ |
1,504 |
|
$ |
3,472 |
|
$ |
194 |
|
$ |
3,666 |
|
The reconciliation provided below reconciles the non-GAAP financial measures with the most directly comparable GAAP financial measures for the three-months and nine-months ended September 30, 2008.
|
|
Three-months ended |
|
Nine-months ended |
|
||||||||||||||
|
|
September 30, 2008 |
|
September 30, 2008 |
|
||||||||||||||
|
|
|
|
|
|
Diluted |
|
|
|
|
|
Diluted |
|
||||||
|
|
Operating |
|
Net |
|
earnings |
|
Operating |
|
Net |
|
earnings |
|
||||||
|
|
income |
|
income |
|
per share |
|
income |
|
income |
|
per share |
|
||||||
Reported GAAP measure |
|
$ |
1,513 |
|
$ |
991 |
|
$ |
1.41 |
|
$ |
4,463 |
|
$ |
2,924 |
|
$ |
4.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss on sale of businesses (d) |
|
|
|
|
|
|
|
23 |
|
32 |
|
0.05 |
|
||||||
Exit activities (e) |
|
49 |
|
36 |
|
0.05 |
|
68 |
|
50 |
|
0.07 |
|
||||||
Gain on sale of real estate (f) |
|
(41 |
) |
(28 |
) |
(0.04 |
) |
(41 |
) |
(28 |
) |
(0.04 |
) |
||||||
Adjusted Non-GAAP measure |
|
$ |
1,521 |
|
$ |
999 |
|
$ |
1.42 |
|
$ |
4,513 |
|
$ |
2,978 |
|
$ |
4.19 |
|
(d) In June 2008, 3M completed the sale of HighJump Software, a 3M company, to Battery Ventures, a technology venture capital and private equity firm. 3M received proceeds of $85 million for this transaction and recognized, net of assets sold, transaction and other costs, a pre-tax loss of $23 million in the second quarter of 2008 (recorded in the Safety, Security and Protection Services segment). This pre-tax loss was reported on a separate line of the Consolidated Statement of Income. 3Ms tax basis in HighJump Software was significantly lower than its book value, primarily related to the treatment of acquired goodwill. This resulted in a gain for tax purposes, which increased the provision for income taxes by $9 million.
(e) During the third quarter of 2008, management approved and committed to undertake certain exit activities, which resulted in a net pre-tax charge of $49 million. This charge primarily related to employee-related liabilities and fixed asset impairments, with actions taken in Display and Graphics, Industrial and Transportation, Health Care, Safety, Security and Protection Services, and Corporate. In the second quarter of 2008, the Company recorded pre-tax charges of $19 million related to exit activities. These charges related to employee reductions at an Industrial and Transportation manufacturing facility located in the United Kingdom.
(f) In March 2008, 3M entered into a sale-leaseback transaction relative to an administrative location in Italy. 3M anticipates leasing back the facility through late 2009 at which time a new location will be utilized. The vast majority of the proceeds were received in September 2008, which resulted in a pre-tax gain of approximately 29 million Euros ($41 million) in the third quarter of 2008. This gain was recorded in selling, general and administrative expenses in Corporate and Unallocated.
The reconciliation provided below reconciles the non-GAAP operating income measure by business segment with the most directly comparable GAAP financial measure for the three-months and nine-months ended September 30, 2008.
|
|
Three-months ended |
|
Nine-months ended |
|
||||||||||||||
OPERATING |
|
Reported |
|
|
|
Adjusted |
|
Reported |
|
|
|
Adjusted |
|
||||||
INCOME BY |
|
GAAP |
|
Special |
|
Non-GAAP |
|
GAAP |
|
Special |
|
Non-GAAP |
|
||||||
BUSINESS SEGMENT |
|
measure |
|
items |
|
measure |
|
measure |
|
items |
|
measure |
|
||||||
Industrial and Transportation |
|
$ |
415 |
|
$ |
11 |
|
$ |
426 |
|
$ |
1,334 |
|
$ |
30 |
|
$ |
1,364 |
|
Health Care |
|
294 |
|
10 |
|
304 |
|
926 |
|
10 |
|
936 |
|
||||||
Consumer and Office |
|
223 |
|
|
|
223 |
|
580 |
|
|
|
580 |
|
||||||
Safety, Security and Protection Services |
|
212 |
|
3 |
|
215 |
|
594 |
|
26 |
|
620 |
|
||||||
Display and Graphics |
|
162 |
|
20 |
|
182 |
|
535 |
|
20 |
|
555 |
|
||||||
Electro and Communications |
|
158 |
|
|
|
158 |
|
460 |
|
|
|
460 |
|
||||||
Corporate and Unallocated |
|
70 |
|
(36 |
) |
34 |
|
96 |
|
(36 |
) |
60 |
|
||||||
Elimination of Dual Credit |
|
(21 |
) |
|
|
(21 |
) |
(62 |
) |
|
|
(62 |
) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Operating Income |
|
$ |
1,513 |
|
$ |
8 |
|
$ |
1,521 |
|
$ |
4,463 |
|
$ |
50 |
|
$ |
4,513 |
|
3M Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET (g)
(Dollars in millions)
(Unaudited)
|
|
Sept. 30, |
|
Dec. 31, |
|
Sept. 30, |
|
|||
|
|
2009 |
|
2008 |
|
2008 |
|
|||
ASSETS |
|
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
3,239 |
|
$ |
1,849 |
|
$ |
2,240 |
|
Marketable securities |
|
697 |
|
373 |
|
727 |
|
|||
Accounts receivable net |
|
3,638 |
|
3,195 |
|
3,763 |
|
|||
Inventories |
|
2,635 |
|
3,013 |
|
3,078 |
|
|||
Other current assets |
|
987 |
|
1,168 |
|
972 |
|
|||
Total current assets |
|
11,196 |
|
9,598 |
|
10,780 |
|
|||
Marketable securities non-current |
|
519 |
|
352 |
|
652 |
|
|||
Investments |
|
106 |
|
111 |
|
119 |
|
|||
Property, plant and equipment net |
|
6,923 |
|
6,886 |
|
6,809 |
|
|||
Prepaid pension benefits (h) |
|
41 |
|
36 |
|
1,684 |
|
|||
Goodwill, intangible assets and other assets (h) |
|
8,848 |
|
8,810 |
|
7,767 |
|
|||
Total assets |
|
$ |
27,633 |
|
$ |
25,793 |
|
$ |
27,811 |
|
|
|
|
|
|
|
|
|
|||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|||
Current liabilities |
|
|
|
|
|
|
|
|||
Short-term borrowings and current portion of long-term debt |
|
$ |
921 |
|
$ |
1,552 |
|
$ |
2,257 |
|
Accounts payable |
|
1,404 |
|
1,301 |
|
1,557 |
|
|||
Accrued payroll |
|
685 |
|
644 |
|
660 |
|
|||
Accrued income taxes |
|
540 |
|
350 |
|
563 |
|
|||
Other current liabilities |
|
2,216 |
|
1,992 |
|
1,963 |
|
|||
Total current liabilities |
|
5,766 |
|
5,839 |
|
7,000 |
|
|||
Long-term debt |
|
5,204 |
|
5,166 |
|
4,779 |
|
|||
Pension and postretirement benefits (h) |
|
2,058 |
|
2,847 |
|
1,307 |
|
|||
Other liabilities |
|
1,686 |
|
1,637 |
|
2,152 |
|
|||
Total liabilities |
|
14,714 |
|
15,489 |
|
15,238 |
|
|||
Total equity net (h) |
|
12,919 |
|
10,304 |
|
12,573 |
|
|||
Shares outstanding |
|
|
|
|
|
|
|
|||
September 30, 2009: 707,958,268 shares |
|
|
|
|
|
|
|
|||
December 31, 2008: 693,543,287 shares |
|
|
|
|
|
|
|
|||
September 30, 2008: 692,955,037 shares |
|
|
|
|
|
|
|
|||
Total liabilities and equity |
|
$ |
27,633 |
|
$ |
25,793 |
|
$ |
27,811 |
|
(g) Certain amounts in the prior years Consolidated Balance Sheet have been reclassified to conform to the current year presentation. As discussed in Note 1 in 3Ms Current Report on Form 8-K filed on May 13, 2009 (which updated 3Ms 2008 Annual Report on Form 10-K), 3M adopted accounting standards related to noncontrolling interest and convertible debt instruments, effective January 1, 2009. Both standards required retrospective application. In addition, 3M reclassified balance sheet amounts related to life insurance policies from investments to other assets and also reclassified current and non-current balance sheet amounts related to income taxes between deferred income taxes and accrued income taxes.
(h) When comparing September 30, 2009, and December 31, 2008, to September 30, 2008, balance sheet amounts, the changes in 3Ms defined benefit pension and postretirement plans funded status, which is required to be measured as of each year-end, significantly impacted several balance sheet lines. This required annual measurement at December 31, 2008, decreased prepaid pension benefits assets by $1.7 billion, increased deferred taxes within other assets by $1.1 billion, increased non-funded pension and postretirement benefits long-term liabilities by $1.7 billion and decreased equity by $2.3 billion. Other pension and postretirement changes, such as contributions and amortization, also impacted these balance sheet captions. 3M made a non-cash U.S. pension contribution of approximately $600 million in shares of its common stock during the three-months ended September 30, 2009.
3M Company and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in millions)
(Unaudited)
|
|
Nine-months ended |
|
||||
|
|
2009 |
|
2008 |
|
||
SUMMARY OF CASH FLOW: |
|
|
|
|
|
||
|
|
|
|
|
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
$ |
3,897 |
|
$ |
3,408 |
|
Cash flows from investing activities: |
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
(629 |
) |
(1,008 |
) |
||
Acquisitions, net of cash acquired |
|
(67 |
) |
(834 |
) |
||
Other investing activities |
|
(380 |
) |
(167 |
) |
||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
|
(1,076 |
) |
(2,009 |
) |
||
Cash flows from financing activities: |
|
|
|
|
|
||
Change in debt |
|
(634 |
) |
1,494 |
|
||
Purchases of treasury stock |
|
(10 |
) |
(1,597 |
) |
||
Reissuances of treasury stock |
|
291 |
|
257 |
|
||
Dividends paid to stockholders |
|
(1,070 |
) |
(1,052 |
) |
||
Other financing activities |
|
6 |
|
(5 |
) |
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
(1,417 |
) |
(903 |
) |
||
|
|
|
|
|
|
||
Effect of exchange rate changes on cash |
|
(14 |
) |
(152 |
) |
||
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents |
|
1,390 |
|
344 |
|
||
Cash and cash equivalents at beginning of period |
|
1,849 |
|
1,896 |
|
||
Cash and cash equivalents at end of period |
|
$ |
3,239 |
|
$ |
2,240 |
|
3M Company and Subsidiaries
SUPPLEMENTAL CASH FLOW AND
OTHER SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions)
(Unaudited)
|
|
Nine-months ended |
|
||||
|
|
2009 |
|
2008 |
|
||
NON-GAAP MEASURES |
|
|
|
|
|
||
Free Cash Flow: |
|
|
|
|
|
||
Net cash provided by operating activities |
|
$ |
3,897 |
|
$ |
3,408 |
|
Purchases of property, plant and equipment |
|
(629 |
) |
(1,008 |
) |
||
Free Cash Flow (i) |
|
$ |
3,268 |
|
$ |
2,400 |
|
(i) Free cash flow is not defined under U.S. generally accepted accounting principles (GAAP). Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The company believes free cash flow is a useful measure of performance and uses this measure as an indication of the strength of the company and its ability to generate cash.
|
|
September 30, |
|
||
|
|
2009 |
|
2008 |
|
OTHER NON-GAAP MEASURES: |
|
|
|
|
|
Net Working Capital Turns (j) |
|
5.1 |
|
5.0 |
|
(j) The company uses various working capital measures that place emphasis and focus on certain working capital assets and liabilities. 3Ms net working capital index is defined as quarterly net sales multiplied by four, divided by ending net accounts receivable plus inventory less accounts payable. This measure is not recognized under U.S. generally accepted accounting principles and may not be comparable to similarly titled measures used by other companies.
3M Company and Subsidiaries
SALES CHANGE ANALYSIS
(Unaudited)
Sales Change Analysis
By Geographic Area
|
|
Three-Months Ended September 30, 2009 |
|
||||||||
|
|
United |
|
|
|
Asia- |
|
Latin |
|
World- |
|
|
|
States |
|
Europe |
|
Pacific |
|
Canada |
|
Wide |
|
Volume organic |
|
(12.4 |
)% |
(7.9 |
)% |
2.6 |
% |
(9.0 |
)% |
(7.1 |
)% |
Price |
|
2.1 |
|
2.0 |
|
(1.7 |
) |
10.0 |
|
2.0 |
|
Organic local-currency sales |
|
(10.3 |
) |
(5.9 |
) |
0.9 |
|
1.0 |
|
(5.1 |
) |
Acquisitions |
|
2.0 |
|
3.5 |
|
0.3 |
|
0.8 |
|
1.8 |
|
Local-currency sales |
|
(8.3 |
) |
(2.4 |
) |
1.2 |
|
1.8 |
|
(3.3 |
) |
Divestitures |
|
|
|
(0.1 |
) |
|
|
|
|
|
|
Translation |
|
|
|
(6.8 |
) |
1.8 |
|
(8.7 |
) |
(2.3 |
) |
Total sales change |
|
(8.3 |
)% |
(9.3 |
)% |
3.0 |
% |
(6.9 |
)% |
(5.6 |
)% |
Worldwide
Sales Change Analysis
By Business Segment
|
|
Three-Months Ended September 30, 2009 |
|
||||||||||
|
|
Organic |
|
|
|
|
|
|
|
|
|
|
|
|
|
local- |
|
|
|
Local- |
|
|
|
|
|
Total |
|
|
|
currency |
|
Acqui- |
|
currency |
|
Divest- |
|
Trans- |
|
sales |
|
|
|
sales |
|
sitions |
|
sales |
|
itures |
|
lation |
|
change |
|
Industrial and Transportation |
|
(9.4 |
)% |
3.0 |
% |
(6.4 |
)% |
|
% |
(2.2 |
)% |
(8.6 |
)% |
Health Care |
|
4.4 |
% |
0.3 |
% |
4.7 |
% |
|
% |
(3.1 |
)% |
1.6 |
% |
Consumer and Office |
|
(7.6 |
)% |
2.8 |
% |
(4.8 |
)% |
|
% |
(1.8 |
)% |
(6.6 |
)% |
Safety, Security and Protection Services |
|
(2.1 |
)% |
0.1 |
% |
(2.0 |
)% |
|
% |
(4.1 |
)% |
(6.1 |
)% |
Display and Graphics |
|
3.0 |
% |
2.5 |
% |
5.5 |
% |
|
% |
(1.0 |
)% |
4.5 |
% |
Electro and Communications |
|
(15.9 |
)% |
0.6 |
% |
(15.3 |
)% |
(0.3 |
)% |
(0.9 |
)% |
(16.5 |
)% |
Sales Change Analysis
By Geographic Area
|
|
Nine-Months Ended September 30, 2009 |
|
||||||||
|
|
|
|
|
|
|
|
Latin |
|
|
|
|
|
United |
|
|
|
Asia- |
|
America/ |
|
World- |
|
|
|
States |
|
Europe |
|
Pacific |
|
Canada |
|
Wide |
|
Volume organic |
|
(15.5 |
)% |
(14.4 |
)% |
(9.5 |
)% |
(12.6 |
)% |
(13.2 |
)% |
Price |
|
2.7 |
|
1.9 |
|
(1.9 |
) |
9.4 |
|
2.0 |
|
Organic local-currency sales |
|
(12.8 |
) |
(12.5 |
) |
(11.4 |
) |
(3.2 |
) |
(11.2 |
) |
Acquisitions |
|
2.8 |
|
4.0 |
|
0.6 |
|
1.6 |
|
2.4 |
|
Local-currency sales |
|
(10.0 |
) |
(8.5 |
) |
(10.8 |
) |
(1.6 |
) |
(8.8 |
) |
Divestitures |
|
(0.3 |
) |
(0.1 |
) |
|
|
|
|
(0.2 |
) |
Translation |
|
|
|
(11.5 |
) |
(1.3 |
) |
(13.2 |
) |
(5.0 |
) |
Total sales change |
|
(10.3 |
)% |
(20.1 |
)% |
(12.1 |
)% |
(14.8 |
)% |
(14.0 |
)% |
Worldwide
Sales Change Analysis
By Business Segment
|
|
Nine-Months Ended September 30, 2009 |
|
||||||||||
|
|
Organic |
|
|
|
|
|
|
|
|
|
|
|
|
|
local- |
|
|
|
Local- |
|
|
|
|
|
Total |
|
|
|
currency |
|
Acqui- |
|
currency |
|
Divest- |
|
Trans- |
|
sales |
|
|
|
sales |
|
sitions |
|
sales |
|
itures |
|
lation |
|
change |
|
Industrial and Transportation |
|
(17.3 |
)% |
3.0 |
% |
(14.3 |
)% |
|
% |
(4.8 |
)% |
(19.1 |
)% |
Health Care |
|
1.7 |
% |
1.2 |
% |
2.9 |
% |
|
% |
(6.6 |
)% |
(3.7 |
)% |
Consumer and Office |
|
(5.1 |
)% |
2.4 |
% |
(2.7 |
)% |
|
% |
(4.4 |
)% |
(7.1 |
)% |
Safety, Security and Protection Services |
|
(8.9 |
)% |
3.4 |
% |
(5.5 |
)% |
(1.1 |
)% |
(6.9 |
)% |
(13.5 |
)% |
Display and Graphics |
|
(10.6 |
)% |
3.0 |
% |
(7.6 |
)% |
|
% |
(2.7 |
)% |
(10.3 |
)% |
Electro and Communications |
|
(23.6 |
)% |
0.6 |
% |
(23.0 |
)% |
(0.1 |
)% |
(3.2 |
)% |
(26.3 |
)% |
3M Company and Subsidiaries
BUSINESS SEGMENTS
(Dollars in millions)
(Unaudited)
Effective in the first quarter of 2009, 3M made certain changes to its business segments in its continuing effort to drive growth by aligning businesses around markets and customers. Segment information for all periods presented has been reclassified to reflect this new segment structure. Refer to 3Ms Current Report on Form 8-K filed May 13, 2009, which updated 3Ms Annual Report on Form 10-K filed February 17, 2009, for discussion of these changes.
BUSINESS
SEGMENT
INFORMATION
(Millions)
|
|
Three-months ended |
|
Nine-months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
||||
NET SALES |
|
|
|
|
|
|
|
|
|
||||
Industrial and Transportation |
|
$ |
1,901 |
|
$ |
2,078 |
|
$ |
5,208 |
|
$ |
6,438 |
|
Health Care |
|
1,083 |
|
1,066 |
|
3,145 |
|
3,266 |
|
||||
Consumer and Office |
|
923 |
|
988 |
|
2,584 |
|
2,782 |
|
||||
Safety, Security and Protection Services |
|
864 |
|
921 |
|
2,352 |
|
2,721 |
|
||||
Display and Graphics |
|
896 |
|
857 |
|
2,315 |
|
2,581 |
|
||||
Electro and Communications |
|
617 |
|
740 |
|
1,648 |
|
2,235 |
|
||||
Corporate and Unallocated |
|
4 |
|
6 |
|
12 |
|
21 |
|
||||
Elimination of Dual Credit |
|
(95 |
) |
(98 |
) |
(263 |
) |
(284 |
) |
||||
Total Company |
|
$ |
6,193 |
|
$ |
6,558 |
|
$ |
17,001 |
|
$ |
19,760 |
|
|
|
|
|
|
|
|
|
|
|
||||
OPERATING INCOME |
|
|
|
|
|
|
|
|
|
||||
Industrial and Transportation |
|
$ |
382 |
|
$ |
415 |
|
$ |
841 |
|
$ |
1,334 |
|
Health Care |
|
339 |
|
294 |
|
975 |
|
926 |
|
||||
Consumer and Office |
|
227 |
|
223 |
|
589 |
|
580 |
|
||||
Safety, Security and Protection Services |
|
236 |
|
212 |
|
544 |
|
594 |
|
||||
Display and Graphics |
|
206 |
|
162 |
|
449 |
|
535 |
|
||||
Electro and Communications |
|
116 |
|
158 |
|
204 |
|
460 |
|
||||
Corporate and Unallocated |
|
(7 |
) |
70 |
|
(72 |
) |
96 |
|
||||
Elimination of Dual Credit |
|
(21 |
) |
(21 |
) |
(58 |
) |
(62 |
) |
||||
Total Company |
|
$ |
1,478 |
|
$ |
1,513 |
|
$ |
3,472 |
|
$ |
4,463 |
|
For the three-months and nine-months ended September 30, 2009 and September 30, 2008, refer to the preceding notes (bf) and the preceding reconciliation of operating income by business segment for a discussion and summary of items that impacted reported business segment operating income.
Investor Contacts: |
Matt Ginter |
|
Media Contact: |
|
Jacqueline Berry |
|
3M |
|
|
|
3M |
|
(651) 733-8206 |
|
|
|
(651) 733-3611 |
|
|
|
|
|
|
|
Bruce Jermeland |
|
|
|
|
|
3M |
|
|
|
|
|
(651) 733-1807 |
|
|
|
|
From:
3M Public Relations and Corporate Communications
3M Center, Building 225-1S-15
St. Paul, MN 55144-1000